GBP/USD Forex Pair Basics – What it is and How to Trade it

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The GBP/USD Forex pair consists of the currencies of two of the leading global economies – the British Pound and its abbreviation GBP (meaning Great Britain Pound) with the U.S. Dollar, aka USD.

In this video about the GBP/USD basics we’ll discuss the main factors that impact the pound dollar rate, we’ll show you how you can trade pound dollar CFDs on the capital.com trading platform.

Trading the pound, aka the “Cable”, the GBP/USD has a place in the the top five most-widely traded global currency pairs. It’s price is impacted by the value of the British pound and/or the U.S. dollar, their economies and political circumstances. But perhaps the most important factor that impacts forex trading is the interest rate differential between cental banks of the two countries whose currencies form this forex pair: The Federal Reserve (the Fed) and the Bank of England (BoE).

One scenario would have the BoE intervene in market activities to make the pound stronger, then the price of the GBPUSD pair could increase, because of the added strength to the British Pound compared to the U.S. Dollar.

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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.6% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.